Business News » Financial Comments

Gold Investment Guide

viliyana89 — Tue, 05 Jul 2011 19:47:50 +0000

The gold is one of the best developing investors instruments, which is making high profits all the time. The gold is usually having good increase of its price, stable trend and small fluctuations. The last 12 months showed that the gold is the strongest currency and this was the main reason for the gold to reach top price ever – 1576.93 USD per ounce. The gold is really good investment instrument for long term investments and usually gives you strong and quality income from your money. Really the Gold Investment Guide gives you good advices how to find the best way in the world of money and how to make money from gold investments.
The price of the gold is still strong and very high, which is usual for the gold. The global trends of the gold is really increasing and this can be easily seen when you see the charts for longer period, but definitely the gold is part of the forex, so this investment is part only from the reserves, but not from the partfolio of the banks and insurance companies.

Playing on the forex market

viliyana89 — Tue, 05 Jul 2011 16:48:04 +0000

The spread betting is useful way to make money in forex, when playing directly on the financial markets. Getting part from the forex is really easy, just with 200-300 EUR deposit and usually the websites, offering platforms for forex trade are giving high Spread Betting Bonuses, which can vary according to the company and their marketing strategy. Getting started in forex can be done with a simple demo, where you invest a lot of money and see really real movements of the currencies and their values. In this way you just play with virtual money and check how you are doing. You can check the widgets of the platform, how it function and how profitable are your decisions.
The important feature of the forex is that you are playing with much more money than you have. The forex platforms are giving you ability to invest 100 times more money than you have. Your money are just covering the differences in the values and can cover only your loses. If your loses are too big the platform will automatically sell your activities, when the balance is close to 0.

The bankruptcy of USA is more probable than those of Indonesia and Slovenia

viliyana89 — Thu, 26 May 2011 10:23:42 +0000

Sounds strange to suggest that the U.S. stands a risk of bankruptcy. This is considered a great scenario for the country, which rarely had the opportunity to be credited so cheap that issue debt in their own currency and which clearly showed that it can printed as much money as it needs to cover its interest obligations. In recent days however, more and more traders come to the conclusion that America may have violated its own constitutional rule for taking on new debt and to experience problems. According to data from Markit price swaps to prevent bankruptcy of the United States for a period of one year has almost tripled in just six days. The data that might be quite biased, show that the bankrupt U.S. is now more probable than that of Indonesia and Slovenia. For these developments on the market of swaps bankruptcy protection, it was because of lack of commitment and flexibility in making important decisions by Congress. Complication is facilitated by congressmen like John Bonar, according to which is better U.S. to declare bankruptcy rather than raise the limit of indebtedness not deal with deficit. The traders believed that a traditional political approach, but only until the opinion of Bonar was not supported by Stanley Drukhaymer – distinguished former hedge fund manager.
He said the omission of any interest payment will be more valuable and useful in persuading the White House to cut some costs. The danger lies in the fact that the technical bankruptcy at which the state will stop servicing their debts, are unlikely to persuade Democrats that have to change their views as regards the contraction of government spending. At the same time and no signs that Republicans are willing to accept a tax increase. Instead it may be that this political move leads U.S. to total disaster. If the technical bankruptcy led to lower the credit rating of U.S., as should happen, it would be a disaster. The reason is that a huge amount of institutional investors will have to bankrupt position with a lower rating, which will cause a collapse in the price of U.S. debt. For the moment, fear of this scenario appear to be fairly limited as far as can be judged from the market of swaps for protection against bankruptcy. The more congressmen, however, play around with a political discourse about non-performing debt, however, the more fear will be soaked to the bond markets.

The age of cheap financing is close to its end

viliyana89 — Mon, 31 Jan 2011 17:09:46 +0000

The global economy is facing a dilemma. Efforts to support economic growth slashed interest rates in developed economies, and hot money, occurring as a result, destabilizing exchange rates and led to inflation and rising asset prices in the developing world. The accumulation of foreign reserves and placing barriers to capital flows flowing increasingly replacing tariffs and quotas in the arsenal of tools used by governments for trade protectionism. Yet, even in times when smoldering foreign wars are about to develop into open trade conflict, we must not forget one thing – it will not last forever, write Richard Dobbs, director of the McKinsey Global Institute and Michael Spence, winner of Nobel Prize for Economics in its report ‘Farewell to Cheap Capital’. The 30-year era of progressively cheaper capital to an end. The global economy will soon have to deal with problems caused by too little rather than too much capital. Worries about the hottest capital pouring too fast in emerging markets may soon be replaced by an era of financial protectionism, in which governments will limit capital flight, to protect as well as corporations and consumers by raising interest rates. Since 1980, the difference in cost of capital across countries melt due to the globalization of financial markets and lower risk premia in developing countries. Capital was abundant, as long-term interest rates also fell, primarily as a result of the reduced investment in infrastructure and production facilities. Global investment fell dramatically, leading to a decline in demand for capital, significantly higher than the growth of demand, fueled by budget surpluses in Asia. In other words, “with savings glut”, so often cited as a reason for lower interest rates, in practice proved to be a result of the decline in global investment.
Today, however, this trend is reversed. Rapid urbanization in Asia, Latin America and Africa increased demand for new water supply systems, roads, housing and industrial facilities. Demand for investment globally will increase substantially by 2030, reaching levels not seen since the years of postwar reconstruction in Europe and Japan. For several reasons, however, the global appetite for energy saving is unlikely to increase. China plans to stimulate domestic consumption. Costs will increase with aging in many countries. Even the increased costs to resolve or adapt to climate change will play a role. As a result, the world will soon enter a new era of shortages of capital and rising long term interest rates. Higher interest rates, on the other hand, will rein in investment and ultimately may slow global economic growth by 1 percentage point per year. The consequences of age at the inaccessibility of capital will be serious. Governments should expect higher prices of debt and act now to tight public finances. Fiscal deficits are now affordable because of low interest rates will not be able to finance as easily in the future and may reflect an even greater withdrawal of private investment. Even with well-arranged public finances, there is a real risk that governments can move very quickly towards financial protectionism to protect their economies from rising prices of capital. New rules can be implemented to prevent the insured from state banks or pension funds to lend or invest abroad, and to commit some funds to invest only at home. Such measures would penalize the global economy. Real interest rates will vary across countries, which will mean that countries with large current account deficits will suffer from low growth. Those who save on the other hand, countries with surpluses will also have lower returns. Therefore, governments should ensure that early signs of the race for saving and international institutions must start to develop financial architecture needed for a world where capital is not enough. New mechanisms and cross-border banking regulations are necessary to facilitate blending of capital from countries with surpluses to areas where money can be invested. New ways of financing infrastructure in developing countries will also prove key. Developing economies need to work on deep and stable financial markets to encourage domestic savings, while developed economies must introduce policies to promote household savings, or at least reduce the levels of use of credit. The businesses will also need to adapt to a world in which capital will cost more. Just as Japanese companies access to cheap capital in 80 years had the advantage over their Western competitors, companies with no access to capital more expensive – for example those based in countries with surpluses, like China, or with links to government investment Funds will enjoy the new competitive advantage. Funding will likely be tied to exports, while financial institutions will have to redirect the focus of its operations to the new global funding sources. For three decades, the world used to cheap capital. The next stage of globalization, however, will be different. Governments will soon want to save. Despite ongoing efforts to support the global recovery should expect an era in which the shortage of capital would put new brakes to growth. A future of widespread financial protectionism would be just as destructive as the current foreign wars. We must take precautions.

Real test for banks will be to raise long-term financial resources

viliyana89 — Sat, 24 Jul 2010 09:26:37 +0000

Since most European banks have moved long-awaited stress tests, they now face even more serious challenge in the coming months, namely – the collection of long-term resource for billions of dollars with which to finance lending. Card is placed on the fragile economic recovery across Europe. Unlike the U.S. the majority of European companies rely on bank financing. If banks fail to attract investors to the bond markets, they will be able to grant long term loans, which businesses to fund their investments. According to the European Central Bank (ECB) bank loans accounted for 70% of debt financing to companies in the euro area, while 80% of loans to U.S. companies raised through capital markets, reported Wall Street Journal. European governments are hoping stress tests that only 7 of 91 banks failed to pass, to reduce concerns about the health of the banking sector in Europe, encouraging investors to buy bonds of credit institutions. So far, banks face problems raising funds from markets, and instead resorted to mass services of the ECB to fund their daily operations. “The real test is whether banks will be financed at a reasonable price from the capital markets to perform their usual function in the economy,” said Gary Jenkins, head of analysis of fixed income instruments at Evolution Securities.
Problems with funding reflected the changed attitude among U.S. money funds, which historically have been a stable source of funding for European banks, says Alastair Ryan, analyst at UBS. Currently, these funds have lost their risk appetite and banks shy away from the Old Continent, partly because of new regulations in the U.S.. Insurance companies, another common source of funding, are about to face higher demands for the holding of bank debt against the looming global regulation. “Overall, financial markets are likely to remain expensive and inaccessible to banks for an extended period of time,” said Ryan. Last month, Bank of England warned that credit institutions in the world (mostly those in Europe) are facing a huge challenge to refinance resource worth 5 trillion. dollars, which is expected to matures over the next three years. Problems are most acute in France, Germany and Italy, where banks annually will have to refinance more debt than they normally issued within a year. According to estimates by the International Monetary Fund (IMF) this year in the euro area mature debts 877 billion in 2011 will be 771 billion and in 2012 to 714 billion. Refinancing of maturing debt is not the only problem facing European banks. New requirements for liquidity offered by international bank regulators require banks to hold more long-term rate (stable) funding, as are deposits and emissions of long-term bonds. This, analysts said, could force banks to raise new funding for the trillions of euros. Natural source of raising funds from banks deposits, which are cheaper than bonds. Therefore, competition for deposits is increasing. This is good for making a deposit, but inflate the cost of financing in the banking sector. Some banks, like the Spanish Banco Santander, is trying to attract deposits in the UK, offering interest rates to 4% – well above competitors, experts share. Recently, some European economists lowered their forecasts for economic growth on the Old Continent this year and next because of problems with bank financing. If, however, stress tests remove pressure on banks, the economic outlook may be better than expected, “said David Mackie, an economist at JP Morgan.

Dow Jones colapse from Thursday may cause new regulations

viliyana89 — Sun, 09 May 2010 22:40:20 +0000

Two days after the collapse of the Dow Jones Index by more than 1000 points during trading on Thursday, the government did not state the reasons. U.S. Leading Index Dow Jones Industrial Average reported 998 points or 9% drop in early trade on Thursday. Subsequently, the panic was overcome and the decline was limited to 3.2%. In Friday’s session Dow lost another 1.3 percent of its value. Growing concern about the Greek debt crisis, complemented by the growth of the Japanese yen may have led to massive sales of U.S. shares of automated trading programs. Initial theories pointed human error when entering a market order, transmits Reuters. U.S. President Barack Obama has said that regulators investigate sudden collapse of the U.S. market, which he called “unusual market activity. More than 50 people working on establishing the causes and prevent similar crashes in the future, but is still not clear whether the cause is within or outside the stock market it has shared government source close to the investigation. According to the news organization Politico regulators investigate whether the catalyst for the collapse was not a series of large transactions with futures on the S & P index on the stock exchange in Chicago. Whatever the reason, the biggest ever points drop in Dow Jones index during one session angered investors and politicians who are already rose up against Wall Street for its role in the global recession.
Senate Democrats have called for amendments to the bill for the financial reform, insisting that U.S. regulators to report on the reasons behind the market crash of Thursday, and whether restrictions are needed on the computer trade. “It is unacceptable to be erased market capitalization of EUR 1 billion dollars because of software problems,” Kaufman wrote Senators Warner and in a letter to the author of the Bill Christopher Dodd, also a Democrat senator. “This is a day that no market participant can not be proud,” said O’Brian Uiliam, CEO of Direct Edge, exchange operator, responsible for over 10% of share trading in the U.S.. “Despite many regulations designed to reduce the risk of such events, obviously there’s more to do.” According to portfolio manager of large corporate pension fund collapse could be gone by the automated program trading, which has responded with massive sales of shares in the first rose against the euro, then dollars to yen. “This unleashes a chain reaction of sales orders, and ultimately the fault is the poor programming and lack of control by the human factor,” he said. The Securities and Exchange Commission (SEC) and the Commission for trading in commodity futures (CFTC) to examine the extent to which different rules for trade between the markets have contributed to increased volatility. Regulatory authorities and stock exchanges are facing two main issues – to prevent a future rapid and massive sales to determine whether a market is trying to take advantage of the situation.

There are no affraids for Spain and Portugal

viliyana89 — Fri, 07 May 2010 17:09:25 +0000

The European Commissioner for Economic and Monetary Affairs Commissioner Olli Rehn rejected claims that the economic crisis in Greece will overtake Spanish as “speculation”. At a news conference in Brussels, where he presented a spring economic forecasts for the EU, Rehn said that Spain does not need such financial assistance and will be offered. “There is no need to offer such assistance. Are unlimited speculation in yesterday’s news about a possible aid from the IMF in relation to Spain. I think we need to” wings “of these false rumors, to avoid unnecessary speculation nurture already reached almost euphoric levels in some circles.” Markets yesterday reported a record drop after rumors that Spain will request financial assistance from the EU or the IMF. We recall that yesterday the IMF Director General Dominique Strauss-Kahn said the fiscal crisis risk in Greece to reach the other weaker European economies. But he stressed that the immediate danger is not referring to that state of Portugal and Spain. In an interview with French newspaper “parasite” Strauss-Kahn said that should prevent such “contaminated” by developing a plan for Greece pursues precisely this purpose.
However, the general director of the international financial institution calls for extreme vigilance situation is not repeated in other European countries.

3 billion USD is the price of the crude oil spill in the Gulf of Mexico

viliyana89 — Sun, 02 May 2010 22:34:11 +0000

The British oil company BP took responsibility for the crisis in the oil patch in the Gulf of Mexico and will pay all expenses necessary to clean the oil spill, world agencies reported. The company management expects that the liquidation of stain will take two to three months. According to U.S. experts cleaning may cost about $ 3 billion. U.S. President Barack Obama has promised that the government will do everything in its power to address oil spills in the Gulf of Mexico. Obama visited Louisiana to inspect the activities address the spill and warned of the danger of an unprecedented ecological disaster. He blamed the disaster began on April 20, oil company BP, which owns the sunken oil platforms, and said that she will have to pay. However, U.S. federal law limits the liability of the company in case of an oil spill to $ 75 million addition, giant British undertook to “cover all legal claims for compensation for damages and losses incurred. As examples indicating loss of property of people and trade losses. Among the first victims of oil stain, which is approaching the coast of Louisiana and Alabama were local fishermen.
Every day the wells beneath the sunken platform in the water released 800,000 liters of oil.

The second wave of the crisis is coming

viliyana89 — Tue, 13 Apr 2010 03:56:50 +0000

The European Central Bank expressed its concern that there might be a new wave of financial crisis. Тоэзи time the focus will stand the fiscal problems of states and the servicing of their debts. For this alert member of the executive board of the bank’s Juergen Stark said on WallStreet Jornal. He said that the U.S. and Japan, which already came out of technical recession may be facing difficulties that are associated with public finance. According to Stark has not paid enough attention to the lack of balance between trade deficits and surpluses in key regions such as North America and Asia. Most probably we have already entered the next phase of the crisis – that the debts are guaranteed by governments, which was preceded by financial and economic one. Many EU countries do not benefit from this heal their finances during the strong economic growth in recent decades. Ultimately we see what happened with Greece and Spain, Portugal and Ireland, which reduced their budget deficits.
According to Stark in 2011 the ratio of government liabilities to GDP would reach 90 percent in the eurozone and Britain, the U.S. 100% and 200% in Japan.

German banks make money on the back of Greece

viliyana89 — Sun, 21 Mar 2010 09:56:50 +0000

The German banks make money at the expense of Greece, gave Prime Minister Theodoros Pangalos accused. He explained that this occurs when his country is waiting from Berlin and the EU assistance to remedy its financial system. “What can be seen from the German position is that banks in Germany have speculated with the bonds to its counterparts in the euro area, as allowed to play with the fate of unhappy people in my country, while on their back in Germany, make money,” said Pangalos. With almost 43 billion euro loan banks are Germany’s biggest creditor of Greece. Berlin last week to oppose the idea of providing new financial assistance to Athens and said that the Greek government only has to cope with the crisis. Greek deputy is one of the most fierce opponents of Germany. His name was implicated in a month ago, the media war between the German magazine Focus, and two Greek newspapers. Pangalos then Germany criticized the attitude of the Greek financial crisis, stressing that Athens never received adequate reparations for World War II. And came to an official note from the the German Foreign Ministry, which said that discussions about the past do not help to solve today’s problems. Now Pangalos prosecution argued with Germany’s export expansion. “Although the countries of Southern Europe suffer from the fall of the euro, German exports because of rising profits, which made massive Germany”, said Deputy Prime Minister of our southern neighbor.
On the same forum was lectured by the Bank of Greece, quoted by the agency Reuters. It said that the country’s economy has turned into a vicious circle of problems, and only strict discipline can help to be shortened huge budget deficit debt. And this can happen to the reforms that help the economy begin to grow, advised the Greek central bank. Vdokladase added that recovery would be prolonged and painful, and initiated measures are only the beginning of the great contraction. The next step will be to support economic growth through structural change, focusing primarily on development of competition. Bank analysts expect that this year will be reported decreased by approximately 2% of GDP. Inflation may reach about 3%. The report said that the fragile economic recovery in the euro zone started in the third quarter of 2009 will continue this year, mainly due to fiscal incentives. Greece’s budget deficit in 2009 reached 12.9 percent of GDP and public debt – 115 percent of GDP.